AFC Energy bags huge Dubai deal

AFC Energy's rags-to-riches story continues with a memorandum of understanding now signed with the Dubai Carbon Centre of Excellence to build 300 megawatts (MW) of fuel cell generation capacity in the region. Having rocketed by as much as one-third to four-year highs, shares in the alkaline fuel cell developer have now risen six-fold since early March.

Once the capacity is fully installed, likely by 2020, it should be the largest single fuel cell deployment programme in the world and could open doors for a potential "multi-billion dollar" revenue stream, reckons the company.

Pre-feasibility studies will be carried out to assess the suitability of the projects, with the pair forming a joint venture to operate and distribute power and water supply if results are positive. Working closely with the Dubai Electricity and Water Authority, Dubai Aluminium Company and Emirates National Oil Company - the first two own Dubai Carbon - AFC will look to local sources for equity and debt financing.

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Chief executive Adam Bond said: "At AFC, I set the ambitious target of achieving 1 GW (1,000 MW) of capacity under development by the end of 2020 and this MOU brings us excitingly closer to our target but I would like to stress that we still have a long way to go."

Earlier this week, former employees exercised share options for over 308,000 new shares at 17.5p and 22p, more than half the 45p share price on Monday.

"Since the appointment of Adam Bond as AFC CEO in December 2014, the uplift in commercial deal-making momentum for AFC has been nothing short of sensational," says Dr Tom McColm, an analyst at house broker Zeus Capital. "At the time of the appointment the stated target of 1GW (1,000MW) of capacity under development by 2020 raised eyebrows; with deals of this magnitude being drafted and the possibility of more to come, it now looks eminently achievable."

However, the company is still not making any money from its fuel cell technology and there is a lot of pressure for the successful delivery of its PowerUp project in Germany. The pressure is still on.

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